Nasdaq loophole fueled 3,750% rise in software stock

The stock exchange is set to make changes after Phunware’s shares soar

By

Dave Michaels and

Alexander Osipovich

February 13, 2019 Updated: 2:47 p.m. GMT

A loophole in Nasdaq’s rules is under scrutiny after a roller-coaster ride in the stock of one small company highlighted how firms can go public without ample shares to trade.

Phunware, a software company planning to launch its own cryptocurrency, surged about 3,750% over six trading days to hit an intraday high of $550 a share on January 10. Just 144,000 shares were eligible to freely trade during that period, according to the company. The stock closed at $113.41 on Tuesday.